Uniform laws for trade secrets in the future?

Trade secrets are utilized when a company wants to keep important or vital information a secret. The business chooses not to disclose the secret for patent protection purposes. Trade secrets are often employed in the information technology field. On the other hand, a specific food recipe can be just as valuable to a company.

Trade secrets serve as legal safeguards. For example, in 2008, Intel spent $1 billion on trade secrets litigation, which ultimately sent a former employee to prison. However, trade secrets by way of the Uniform Trade Secrets Act have been limited. Experts note that this is because the Act is not very uniform. As a result, federal legislation concerning the protection of trade secrets could be in the works, according to legal experts.

The Act was only assumed by 46 states. Moreover, one state is not restricted by another's decision. For example, New York and Texas never took on the Uniform Trade Secrets Act. As a result, provisions are determined differently, depending on the applicable jurisdiction. This is creating problems among national and global companies. Specifically, businesses are forced to make separate trade secret agendas for multiple jurisdictions.

Moreover, the theft of trade secrets can be multijurisdictional. For example, a computer could be hacked in New York, and then subsequently hacked by a person in Florida, who passes the secrets to a person in another jurisdiction. When this happens, it is difficult to decipher which state's business law is applicable.

Potential federal legislation for trade secrets

As a result, the federal standard to trade secrets law could become a reality. Last year, the Theft of Trade Secrets Clarification Act of 2012 was signed, which guards secrets that are not sold and are used internally. Moreover, the Foreign and Economic Penalty Enhancement Act of 2012 was also passed, and this raises consequences associated with the theft of trade secrets. At this time, a federal trade secret act that died last year is now expected to resurface in the future. This will help align laws. Moreover, senate hearings that address foreign theft also are expected.

Ultimately, it could take some time before the proposals go into effect (if ever). Yet, the potential law aims to address serious issues. Once trade secrets are stolen, they are vulnerable to varied jurisdictions, making prevention and recovery extremely difficult for businesses.

If your company is dealing with trade secret matters, it is best to contact an experienced business law attorney. The laws can be complex and intricate, but a legal professional can help guide you through relevant options.